Explanatory Memorandum
(Circulated by the authority of the Treasurer,the Hon John Dawkins MP)CHAPTER 4
THE CHILD SUPPORT ASSESSMENT ACT 1989
ORDERS FOR DEPARTURE FROM ADMINISTRATIVE ASSESSMENT
ORDERS FOR THE PROVISION OF CHILD SUPPORT OTHERWISE THAN IN FORM OF PERIODIC AMOUNTS PAID TO THE CUSTODIAN
Pensioners not to be able to enter into consent arrangements without the scrutiny of the court.
THE CHILD SUPPORT (ASSESSMENT ) ACT 1989
DIVISION 5 PART 7
ORDERS FOR DEPARTURE FROM ADMINISTRATIVE ASSESSMENT IN SPECIAL CIRCUMSTANCES
ORDERS FOR PROVISION OF CHILD SUPPORT OTHERWISE THAN IN FORM OF PERIODIC AMOUNTS PAID TO CUSTODIAN
Summary of proposed amendments
4.1. This proposed amendment will ensure that pensioners are not able to enter into a consent order for departure from an administrative assessment or by a consent order for the provision of child support otherwise than in the form periodic amounts, unless the consent order is scrutinised by the court. The reasons for making the order must be entered in the records of the court, together with its reasons for being satisfied the order should be made.
4.2. There are special provisions in the child support legislation for custodians who are in receipt of an income tested pension, allowance or benefit. Coupled with the requirement for them to take reasonable action for maintenance under the Department of Social Security guidelines, the vast majority of pensioners are required to register their maintenance liabilities with the Agency and have the amounts payable collected by the Agency.
4.3. There are however two possibilities in which a pensioner can minimise the impact of the child support legislation and the maintenance guidelines. They may either seek to maximise a benefit entitlement themselves or they could perhaps be subjected to undue pressure from the non custodian to reduce the amount to be paid by entering into an arrangement by consent to either depart from the assessment or to receive non periodic amounts (transfers of capital etc in lieu of periodic cash payments).
4.4. The opportunity to do this lies in the fact that such consent arrangements are not required to receive the scrutiny of the court and, as a result, reasons do not have to be given for the consent order to be made including reasons why the court is satisfied that it is just, equitable and otherwise proper to do so. The court is required to consider this if it makes its own order.
4.5. The scope to circumvent child support assessments is therefore present and has the potential to nullify the intentions of the legislation in these cases.
Explanation of the proposed amendments
4.6. The proposed amendment will deny custodians who are in receipt of an income tested pension, allowance or benefit from being able to enter into consent arrangements to depart from an assessment or to receive amounts of maintenance in the form of non periodic amounts without scrutiny of those arrangements by the court [Clauses 8 and 9].
4.7. The outcome of this amendment will be to require the court to:
- (1)
- give reasons for accepting the consent departure arrangement and the reasons why the court is satisfied there are grounds to depart from the assessment including why it is just and equitable and otherwise proper to do so; and,
- (2)
- give reasons for accepting a consent arrangement for the custodian to receive maintenance in a form other than periodic amounts and the reasons why a statement or statements made in the order to have the non periodic amount either to be counted or not counted in any administrative assessment have been made.
4.8. The amendment will apply from the date the Royal Assent is given to the Child Support Legislation (Amendment) Bill 1992 [Clause 2].
Clauses involved in the proposed amendments
Clause 2: proposes that the Act proposed by the Bill will commence on the date it is given the Royal Assent.
Clause 8: amends section 118 of the Act to give effect to the amendment.
Clause 9: amends section 126 of the Act to give effect to the amendment.